so the call to connect should still be traceable a bit by single-stepping...Might help to know if the issue is before or after getting a local socket to use. Not that I think that would help too much, but it still might get you a bit closer to a solution.

Any chance to try the code on another machine ? Are you running this with the same privileges as when you do successfully telnet ? Maybe you can check if it behaves the same way when you run it as Administrator?